Fifth Fiscal Period

Financial Results of the Fifth Fiscal Period(April 2006)

— Contents —1. Overview of Fund Management

4. Fund Management Results

Appendix• Highlights of the Current Period219• Growth of the Fund (1)“Changes in Performance”• Results of Investment Sector• Properties Acquired during the

320• Growth of the Fund (2)“Changes in Fund Management”

Current Period (1)• Properties Acquired during the

421• Summary of the Fund

5

Current Period (2)• Diversification of Portfolio (1)“Assets”• Diversification of Portfolio (2)22

2. Future Management Policies• Analysis of the Market

7• Future Growth Strategies8

3. Financial Results• Income Statement10• Balance Sheet• Cash Distributions

11
12• Financial Indices• Cash Flow Statement

13
14• Debt Financing• Unitholders

1516• Forecasts of the Sixth Fiscal Period

17• List of Property

34• Earnings by Property

35• Map of Property

36• Photo of Property(29 properties as of June 21, 2006)“Tenants”
23• Results of Asset Management Sector 24• Increase in Earning Power of Portfolio 25• Enhancing Competitiveness of
Property by Renovation• Move-Ins and Move-Outs

26
27• End-of-Period Appraisal Value• Results of Financial Sector28
29• Public Offering of Corporation Bonds
and Investment Units
30• Overview of Financial Status
31• Post-Balance Sheet Financial Status 32

37• Acquisition Channel of Property

38• Unit Price and Aggregate Market Value

39(From Dec. 4, 2003 to Jun. 21, 2006)• Structure of the Asset Management Company 40

1. Overview of Fund Management1Highlights of the Current Period
Performance of the Current Period (181 business days)
Comparison with
Previous Period

Current Period

Forecasts as of
Dec 20, 2005

Comparison with
Actual Results

Operating
Revenues¥9,810 mln+ ¥1,169 mln+ 13.5%¥9,718 mln+ ¥91 mln

+ 0.9%

Operating
Income¥4,558 mln+ ¥447 mln+ 10.9%¥4,435 mln+ ¥123 mln+ 2.8%Net Income¥3,596 mln+ ¥112 mln+ 3.2%¥3,518 mln+ ¥77 mln

+ 2.2%Cash Distribution
per Unit¥15,638 / unit

+ ¥488 / unit

+ 3.2%¥15,300 / unit

+ ¥338 / unit

+ 2.2%

Forecasts of the Sixth Period (184 business days)

Notable Activities (Nov 01, 2005 – Apr 30, 2006)
Investment Sector
Nishi-Shinjuku Showa Bldg (¥8.8 bln)
NOF Sendai Aoba-dori Bldg (¥3.2 bln)
Osaka Chowa Bldg(¥12.9 bln)

Asset Management Sector
Increase in renewal of contracts
at higher rent
Renovation of the basement shopping
floor of Shinjuku Nomura Bldg

Hiroshima Chowa Bldg
Crystal Park Bldg(¥2.1 bln)(¥3.7 bln)

End-of-Period Total Portfolio:¥240.8 bln(Increase from Previous Period: ¥ 30.7 bln)

Financial Sector
Public offering of Corporation Bonds (¥20 bln)
Conversion to long-term fixed interest rate
in debt financing
Implementation of effective use of security
deposits received from tenants

Operating
Revenues¥10,590 mln ( + ¥780 mln / +8.0%) *1

Operating
Income¥4,798 mln ( + ¥239 mln / +5.3%) *1

Net Income¥3,837 mln ( + ¥240 mln / +6.7%) *1

Cash
Distribution
per Unit *2¥14,430 / Unit ( - ¥1,208 / -7.7%) *1*1 Figures in brackets represent the difference from Fifth Fiscal Period.
*2 Number of Investment Units issued at the end of Sixth Fiscal Period:
265,903 units (+35,933 units compared with Fifth Fiscal Period)2Growth of the Fund (1) - Changes in Performance(¥ mln)(¥ mln)<Operating Revenues><Operating Income>

5,000

12,00010,5909,810

10,000

4,111
4,000

8,641
8,000
6,656

3,228

7,106

2,930

3,000

6,000

2,313
4,531

2,000

4,000
2,000

4,798

4,558

1st FP

2nd FP(¥ mln)

3rd FP

4th FP

5th FP

3,484

1,000
1st FP(Forecast)

3,837

2,606

3rd FP

4th FP

5th FP<Cash Distribution per Unit>
15,63815,15014,520
14,11416,0003,596
14,0003,000

2nd FP

6th FP(Forecast)(¥)<Net Income>4,000

6th FP

14,4302,681
12,0002,000
10,000

1,526

10,273

8,000

1,000
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP(Forecast)

1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP(Forecast)3

Growth of the Fund (1) - Changes in Fund Management
Changes in Total Portfolio (by Acquisition Price)
300
250

Shinjuku Nomura Bldg(¥ bln)

184.6

200
150
100

104.2

240.8

127.2

247.6

210.1

Additional investment of ¥143.41 bln in 30 months after
listing

151.5

Constant increase in portfolio by ¥25 - ¥30 bln each period(¥50 - ¥60 bln yearly)

50
0

37.2%

30.4%

25.6%

21.0%

18.4%

16.1%

15.6%

Dec
2003

Apr
2004

Oct
2004

Apr
2005

Oct
2005

Apr
2006

Jun
2006

Changes in NOI Return of Portfolio

Changes in Debt Financing – Fixture at Long Term

[Changes in NOI Return of Portfolio (%)]
1st FP(Apr 2004)
NOI of Portfolio

7.2

2nd FP(Oct 2004)

6.2

60%
3rd FP(Apr 2005)

6.1

4th FP(Oct 2005)

6.1

5th FP(Apr 2006)

5.9

50%
40%
30%

[Breakdown by the number of properties held at each Period-end (%)]
15 Properties for 1st FP
18 Properties for 2nd FP

7.2

6.5

6.7

6.6

6.6

6.2

6.3

6.4

6.3

20%

30.9%

Dec
2003 *

46.4%

41.2%
36.2%

37.2%

Apr May
2004 2004 *

Oct
2004

23 Properties for 4th FP
28 Properties for 5th FP

6.1

6.2
6.1

6.1
6.0
5.9

44.7%
38.9%

36.4%

33.8%

Apr May2005 2005 *

Oct
2005

Apr Jun2006 2006 *Changes in Duration of Long-Term Debts and Average Rate
5.1

5 yrs
19 Properties for 3rd FP*Unaudited

Changes in LTV (based on Total Assets)

4 yrs 3.9

4.4 4.3
3.8 3.7

5.0

3.9

3.3

3 yrs
2 yrs

1.2% 1.0%
Dec
2003

1.1%

Apr May
2004 2004

1.1%
Oct
2004

1.1%
1.3%
Apr May
20052005

1.1%
Oct
2005

1.3% 1.4%
Apr Jun2006 2006

4

Summary of the FundTime of Cut-off

1st FP

2nd FP

3rd FP

4th FP

5th FP

Apr 2004

Oct 2004

Apr 2005

Oct 2005

Apr 2006

Total Assets
Interest-bearing Liabilities
LTV (Total Assets basis)
Unitholders' Capital
Outstanding Units Issued
Net Assets
Net Assets per Unit
Closing Price of Units
Aggregate Market Value

¥mln
¥mln
%
¥mln
Unit
¥mln
¥
¥
¥mln

147,946
61,00041.2
71,706
148,600
73,233492,820
645,000
95,847

173,545
64,50037.2
92,168
184,650
94,774513,266
767,000
141,626

208,00396,50046.4
92,168
184,650
94,849513,672
758,000
139,964

239,067
93,00038.9
124,610
229,970
128,094
557,004
782,000
179,836

268,559
120,000
44.7
124,610
229,970
128,206
557,492
998,000
229,510

Operating Revenues
Operating Income
Net Income
Total Cash Distribution
Cash Distribution per Unit

¥mln
¥mln
¥mln
¥mln
¥

4,531
2,313
1,526
1,526
10,273

6,656
2,930
2,606
2,606
14,114

7,106
3,228
2,681
2,681
14,520

8,641
4,111
3,484
3,484
15,150

9,810
4,558
3,596
3,596
15,638

Total Portfolio (Acquisition Price)
Number of Properties
Leasable Space
Number of Tenants
Occupancy Rate

¥mln

%

127,260
15
180,793.50
264
93.3

151,540
18
194,673.65
277
94.4

184,62019
236,904.67
287
98.1

210,12023
261,428.50
357
97.3

240,82028
293,464.10
467
98.4

NOI on Lease
Rate of NOI on Lease (p.a.)
Depreciation
Capital ExpendituresFFO
FFO per Unit

¥mln
%
¥mln
¥mln
¥mln
¥

3,350
7.2
666
22
2,193
14,757

4,451
6.2
949
511
3,555
19,255

4,970
6.1
1,023
484
3,719
20,142

6,125
6.1
1,229
1,016
4,727
20,559

6,952
5.9
1,399
934
5,034
21,889㎡

5

2. Future Management Policies

6Analysis of the Market
Difficult situations for new acquisition – declining Cap Rate – continues.

Real Estate
Investment Market

Information about pre-launch development projects increases.
Pricing power based on management knowknow-how will become more important.

Tokyo Central Area : Office rents clearly continue to go up due to shortage of supply.

Office Leasing Market

Other areas : Conditions continue to improve – agreed to raise rent in some cases.
These conditions are favorable to enhance profitability of portfolio.
portfolio.

Market continues to enlarge – more listings and larger aggregate market value.

J-REIT Market

Investors become more rigorous to growth potential and risk management.
Further bipolarization – more stringent selection of funds – will develop.

7Future Growth Strategies
1. Maintain and improve the performanceof portfolio.

Mid- to
-Term
Mid
Long
MidtoLongLong-Term
Property
Property
Management
Management• Enhance earning power by increase in rent.
• Enhance competitiveness by renovation.

Increase
Increaseinin Rent
Rent
Mid- to
-Term
Mid
Long
Midto LongLong-Term
Property
Property
Management
Management

Diversify
Diversifyrisks
risks
totosecure
securestablestablerevenues
revenues

Maintain
Maintainand
andimprove
improvetheperformancethe performanceofofportfolio
portfolio

2. Secure ability to continuously raise
funds.
• Strengthen financial base by equity finance.

Increase
Increase inin
Asset
Asset Base
Base

• Stick to conservative financial policy to keepup credit.

Conservative
Conservative
Financial
Financial Policy
PolicyIncrease
Increasein
in
Asset
AssetBase
Base• Maintain credibility – upgrade rating.

Conservative
Conservative
Financial
FinancialPolicy
Policy3. Increase in Asset Base
SecureSecureability
abilitytotocontinuously
continuously
raise
raisefunds
funds• Explore development projects.
• Enhance collaboration with sponsors.

833

3. Financial Results

9Income Statement

Item
Rental Business Revenues
Rental Business Expenses

Operating Profit and Loss
Non-operating Profit and Loss

Current Profit and Loss

Rental business revenues
Rental revenues
Common service charges

Other rental business revenues
Monthly parking revenues
Incidental revenues
Other rental revenues
Miscellaneous revenues

Total rental business revenues
Property management fees
Taxes and duties
Utility expenses
Insurance expenses
Repairs and maintenances
Other expenses
Depreciation

Total rental business expenses
Profits from rental business
Asset management fees
Selling and administrative expenses
Operating profit and loss
Non-operating revenues
Non-operating expenses
Interest expenses
Interest expenses on bonds
Amortization of bond issuance costs

Loan arrangement fees
Inv estment unit issuance costs

Other non-operating expenses

Non-operating profit and loss
Current profit
Net income before tax
Corporate, local and enterprise taxes
Tax adjustment
Net income
Balance brought forward
Retained earnings

4th FP

5th FPMay 1, 2005 - Oct 31, 2005

Nov 1, 2005 - Apr 30, 2006(¥000)
7,709,467
6,138,529
1,570,938
931,881
156,428
707,782
67,58189
8,641,349
833,441
614,908
711,50921,809213,371
121,243
1,229,041
3,745,324
4,896,024
629,689
155,182
4,111,152
9,451
635,530
412,438
108,000
14,85548,78442,7698,682▲ 626,078
3,485,074
3,485,074
1,008
1
3,484,064
107
3,484,171

%
89.2
71.0
18.2
10.8
1.8
8.2
0.8
0.0
100.0
9.6
7.1
8.2
0.3
2.5
1.4
14.2
43.3
56.7
7.3
1.8
47.6
0.1
7.4
4.8
1.2
0.2
0.6
0.5
0.1
▲ 7.3
40.3
40.3
0.0
0.0
40.3
0.0
40.3

(¥000)
8,815,222
7,027,837
1,787,384
995,303
189,348734,285
69,5052,164
9,810,526
981,358
666,061
726,301
22,318302,896
159,138
1,399,417
4,257,491
5,553,034
851,350
142,982
4,558,701
9,789
971,391
482,883
244,722
38,429101,660
103,696▲ 961,602
3,597,098
3,597,098
926
4
3,596,167
126
3,596,294

%
89.9
71.7
18.2
10.1
1.9
7.5
0.7
0.0
100.0
10.0
6.8
7.4
0.2
3.1
1.6
14.3
43.4
56.6
8.7
1.5
46.5
0.1
9.9
4.9
2.5
0.4
1.0
1.1
▲ 9.8
36.7
36.7
0.0
0.0
36.7
0.0
36.7

Rental business revenues
The total number of properties in the portfolio has become 28 as a result of
new acquisition of five properties during the Current Period. They are:Nishi-Shinjuku Showa Bldg, NOF Sendai Aoba-dori Bldg (Sendai Chowa
Bldg), Osaka Chowa Bldg, Hiroshima Chowa Bldg and Crystal Park Bldg.
Occupancy rate at the end of the fifth period was 98.4%, up 1.1% from
97.3% at the end of the fourth period.

Taxes and duties
Property taxes, urban planning taxes and other duties for the current period
were charged on the basis of 24 properties out of 28, which were held at theend of the fifth period.

Repairs and maintenances
In addition to cost of repair of ¥302 million, there was capital expenditure of¥934 million, of which ¥257 million was an initial reserve.

Rental profits:¥5,553 mln (up ¥657 mln from the previous period)
Additional revenues from the newly acquired 5 properties: ¥541 million
Increase in revenues from the existing 23 properties:¥115 million

Incidental revenues
Other rental revenues
Miscellaneous revenues
Other expenses
Operating expenses
Non-operating expenses: Revenues received as utility charges, charges for usageof facility and signboard, etc.
: Hourly parking charges, etc.
: Ground rents, etc.
: Trust fees, commissions, other maintenance fees, etc.
: Administrative service, custodian, and auditing fees, etc.
: Cost of restitution in integrum, etc.

10

Balance Sheet
AssetsAssetsItem
Current Assets
Cash and cash equivalents
Cash and cash equivalents in trust
Other current assets
Fixed Assets
Tangible assets
Propeties
Buildings
Lands
Properties in trust
Buildings
Lands
Other tangible assets
Other tangible assets
Intangible assets
Trust and other intangible assets
Investments and other assets
Security deposits
Investments and other assets
Def erred Assets
Issuing cost of corporation bondTotal assets

4th Fiscal Period
as of Oct 31, 2005(¥000)(%)

5th Fiscal Period
as of Apr 30, 2006(¥000)(%)

26,983,355
8,025,078
18,691,492
266,784
212,024,494
211,566,878
211,317,493
64,217,051
147,100,441
249,385
249,385
1,989
1,989
455,626
210,780
244,846
59,90559,905

11.3%
3.4%
7.8%
0.1%
88.7%
88.5%
88.4%
26.9%
61.5%
0.1%
0.1%
0.0%
0.0%
0.2%
0.1%
0.1%
0.0%
0.0%

26,092,423
8,074,521
17,512,598
505,302242,304,198
241,901,061
3,741,462
1,134,195
2,607,266
238,152,308
69,056,085
169,096,222
7,290
7,290
2,001
2,001
401,136
211,230
189,906
162,436
162,436

9.7%
3.0%
6.5%
0.2%
90.2%
90.1%
1.4%
0.4%
1.0%
88.7%
25.7%
63.0%
0.0%
0.0%
0.0%
0.0%
0.1%
0.1%
0.1%
0.1%
0.1%

239,067,755

100.0%

268,559,058

100.0%

Liabilities
Item
Current liabilities
Accounts payable on trade
Short-term debts

CapitalUnitholders

Liabilities

Long-term debts due for repayment within one year

Other accounts payable
Advance receipts
Other current liabilities
Fixed liabilities
Corporation bonds
Long-term debts
Security deposits
Security deposits in trust
Other fixed liabilities
Total liabilities
Unitholders capital
Retained earnings

Total unitholders capital
Total liabilities and unitholders capital

4th Fiscal Period
as of Oct 31, 2005(¥000)(%)

5th Fis cal Period
as of Apr 30, 2006(¥000)(%)

31,387,836
529,401
21,000,000
7,500,000
917,177
1,439,845
1,411
79,585,533
10,000,000
54,500,000
14,849,571
235,961
110,973,370

13.1%
0.2%
8.8%
3.1%
0.4%
0.6%
0.0%
33.3%
4.2%
22.8%
6.2%
0.1%
46.4%

35,067,420
511,875
16,000,000
15,500,000
1,350,681
1,643,280
61,583
105,285,130
30,000,000
58,500,000
166,548
16,436,835
181,746
140,352,551

13.1%
0.2%
6.0%
5.8%
0.5%
0.6%
0.0%
39.2%
11.2%
21.8%
0.1%
6.1%
0.1%
52.3%

124,610,212
3,484,171

52.1%
1.5%

124,610,212
3,596,294

46.4%
1.3%

128,094,384
239,067,755

53.6%
100.0%

128,206,507
268,559,058

47.7%
100.0%Cash and cash equivalents(¥ mln)Deposits in own name
Equivalent to security deposits received
Equivalent to reserved capital expenditures
Others

8,074
1,318
3,073
3,683

Deposits in trust
Equivalent to security deposits received
Equivalent to reserved capital expenditures
Others17,512
11,704161
5, 647

Tangible assets(¥ mln)Acquisition Accumulated Depreciation End-of-term
pricedepreciation for current term book value

Properties
Buildings in trust
Lands in trust
Buildings
Lands

247,160
74,312
169,096
1,145
2,607

5,267
5,256
11
-

(1,399)(1,388)(11)

241,893
69,056
169,096
1,134
2,607

Debts
Balance of interest-bearing debts (¥ mln)

Interest-bearing debts ratio

120,000

S/T debts + L/T debts + Corp bonds
Total assets
44.7%

Long-term interest-bearing debt ratio

L/T debts + Corp bonds
Total debts

73.8%

11

Cash Distribution
Cash Distribution
4th Fiscal Period
Item

5th Fiscal Period

Cash Distribution

May 1, 2005 - Oct 31, 2005 Nov 1, 2005 - Apr 30, 2006

Retained earnings(¥000)

3,484,171

3,596,294

Cash distribution(¥000)

3,484,045

3,596,270

15,15015,638126

23

Cash distribution per unit(¥)

Balance carried forward(¥000)The total outstanding number of units as of the period-end was
229,970, for which we paid out almost the entire amount ofretained earnings for the period, resulting in the cash distribution
per unit being ¥15,638.

Comparison with Forecasts
Forecasts
announced on
Dec 20, 2005

Item

Actual results forthe 5th Fiscal
PeriodDifference(amount)

Difference(%)

Operating revenues(¥mln)

9,718

9,810

91

0.9

Current profits(¥mln)

3,519

3,597

77

2.2

Net income(¥mln)

3,518

3,596

77

2.2

(¥)

15,30015,638338

2.2

Cash distribution per unit

Difference between forecasts and actual results
Operating revenues
Incremental revenues brought by Crystal Park Bldg: ¥41 million
Incremental revenues brought by the other 27 bldgs: ¥50 million

12Financial IndicesDefinition of indicesComparison through the Five Fiscal Periods
Indices
Return on assets (ROA)

1st FP 2nd FP

3rd FP

4th FP

5th FPROA = Current profits / Average total assets
Number of days used for annualization are as follows.
1st FP: 148 days, 2nd FP: 184 days, 3rd FP: 181 days
4th FP: 184 days, 5th FP: 181 days

(%)

1.1

1.6

1.4

1.5

1.4

(%)

2.8

3.1

2.8

3.1

2.9

(%)

2.1

2.8

2.8

2.7

2.8

(%)

5.2

5.6

5.7

5.4

5.7

Capital-asset ratio

(%)

49.5

54.6

45.6

53.6

47.7

Capital-asset ratio = Unitholders equity / Total assets

Loan to value ratio (LTV ①)

(%)

41.2

37.2

46.4

38.9

44.7

LTV1 = Total interest-bearing debts / Total assets

Loan to value ratio (LTV ②)

(%)

48.0

42.6

51.5

42.4

46.0

Debt service coverage ratio (DSCR)

(x)

11.45

11.05

9.95

10.08

7.92

Net operating income (NOI)(¥ mln)

3,350

4,451

4,970

6,125

6,952

Funds from operation (FFO)(¥ mln)

2,193

3,555

3,719

4,727

5,034

(annualized)
Return on equity (ROE)(annualized)

ROE = Net income / Average unitholders equity
Number of days used for annualization are as follows.
1st FP: 148 days, 2nd FP: 184 days, 3rd FP: 181 days
4th FP: 184 days, 5th FP: 181 days

LTV2 = Total interest-bearing debts / Total appraisal value of property
DSCR = Net income before interest / Interest expenses
NOI = Rental business revenues – Rental business expenses+ Depreciation
FFO = Net income + Depreciation+ Amortization of issuing cost of corporation bonds

13

Cash Flow Statement
Item
I. Cash flowｓ from operating activities
Income before taxes
Depreciation
Amortization of long-term prepaid expenses
Amortization of corporation bond issuance costs

Interest income
Interest expenses
Change in rental receivables
Change in consumption tax refundable
Change in trade accounts payable
Change in other accounts payable
Change in rent received in advance
Change in security deposits received
OthersSubtotalInterest received
Interest paid
Taxes and duties
Net cash provided by operating activities
II. Cash flow of Investment Activities
Purchase of tangible assets
Purchase of tangible assets in trust
Purchase of intangible assets
Security deposits received
Security deposits in trust paid
Security deposits in trust received
Security deposits paid
Net cash used in investment activities
III. Cash flow of Financing Activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from corporation bonds
Issuance cost of corporation bonds
Proceeds from investment units
Cash distribution to unitholders
Net cash provided by financing activities
IV. Change in cash and cash equivalents
V. Starting balance of cash and cash equivalents
VI. Ending balance of cash and cash equivalents

4th Fiscal Period

5th Fiscal Period

May 1, 2005 – Oct 31, 2005

Nov 1, 2005 – Apr 30, 2006(¥000)(¥000)

3,485,074
1,229,069
725
14,855▲ 130
520,438▲ 22,150
395,661
211,017
15,543
157,601
1,281
13,9006,022,886
130▲ 514,602▲ 1,043
5,507,370

3,597,098
1,399,445
725
38,429▲ 138
727,605▲ 22,812▲ 51,349▲ 17,526
138,097
203,434
18,241▲ 122,428
5,908,821
138▲ 548,029▲ 1,0095,359,920▲ 27,286,701▲ 561,173
1,630,814▲ 200,000▲ 26,417,060▲ 3,752,510▲ 27,867,046▲ 105
166,548▲ 478,226
2,062,794▲ 450▲ 29,868,995

19,000,000▲ 22,500,000
32,441,732▲ 2,683,024
26,258,708
5,349,018
21,367,552
26,716,571

18,000,000▲ 23,000,000
19,500,000▲ 7,500,000
20,000,000▲ 140,026▲ 3,480,349
23,379,623▲ 1,129,450
26,716,571
25,587,120

14

Debt Financing
End of 5th FP (Apr 2006)
SourceAmt (¥ bln)

Type of interest

Interest rate (p.a.)Date of repayment

Short-term debts

14 finan insti

16.0

Floating(including long-term
debts due for repayment
within one year)

9 finan insti

12.5

Fixed (Note 1)

2 finan insti

3.0

Fixed

Total short-term debts

17 finan insti

31.5

―

1 finan insti

2.0

Floating

6 finan insti

8.5

5 finan insti
1 finan insti
4 finan insti
5 finan insti
4 finan insti

5.0

Fixed

1.51625%

Dec 8, 2008

2 finan insti

2.0

Fixed (Note 4)

1.19000% (Weighted average after interest rate swap)

Feb 26, 2009

1 finan insti

3.0

Fixed (Note 2)

1.77500% (Weighted average after interest rate swap)

Feb 26, 2010

1 finan insti

1.0

Fixed

1.50625%

Feb 26, 2010

5 finan insti

7.5

Fixed (Note 4)

1.68000% (Weighted average after interest rate swap)

Feb 26, 2011

5 finan insti

5.0

Fixed

1.43750%

Aug 26, 2012

1 finan insti

1.0

Fixed

1.53625%

Aug 26, 2012

1 finan insti

1.0

Fixed

1.75250%

24 finan insti

58.5

―

Long-term debts

Total long-term debts

0.39000% (From Nov 29, 2005 to May 29, 2006)

May 29, 2006

1.14500% (Weighted average after interest rate swap)

Dec 8, 2006

1.04500%

Dec 8, 2006――

0.66455% (From Mar 1, 2006 to Aug 28, 2006)

Aug 28, 2007

Fixed (Note 3)

1.00625% (Weighted average after interest rate swap)

Dec 8, 2007

7.5

Fixed (Note 2)

1.22500% (Weighted average after interest rate swap)

Feb 26, 2008

3.0

Fixed

1.05250%

Feb 26, 2008

4.0

Floating

0.51455% (From Feb 28, 2006 to Aug 28, 2006)

Aug 26, 2008

8.0

Fixed (Note 1)

1.66750% (Weighted average after interest rate swap)

Dec 8, 2008

Description

Unsecured/
Unguaranteed―

Unsecured/
Unguaranteed

Feb 26, 2013
―

―

―

―

―

Total debts

25 finan insti

90.0

―

1st series corp bondPrivate placement

5.0

Fixed

1.85%

2nd series corp bondPrivate placement

5.0

Fixed

2.47%

Mar 16, 2020

3rd series corp bondPublic offering

10.0

Fixed

1.19%

Nov 29, 2010

2.05%

―

Mar 16, 2015
Unsecured/
Unguaranteed

4th series corp bondPublic offering

10.0

Fixed

Total corporation bond

―

30.0

―

―

―

―

Grand total

25 finan insti

120.0

―

―

―

―

Nov 30, 2015

(Note 1) Fixed by interest rate swap from Dec 8, 2003
(Note 2) Fixed by interest rate swap from May 27, 2004
(Note 3) Fixed by interest rate swap from Dec 8, 2004
(Note 4) Fixed by interest rate swap from Feb 27, 200615

Unitholders
Breakdown of Financial Institutions

Number of Unitholders(Units)Individuals
15,284 (96.2%)

End of 4th FP

4th Fiscal Period

Financial Institutions
200 (1.3%)
Other domestic corporations 258 (1.6%)
Foreign corporations
142 (0.9%)

Banks
Trust Banks

15,884
Unitholders

Life companies
Non-life companies

End of 5th FP

Other financial instituions

Financial Institutions
178 (1.4%)
Other domestic corporations 215 (1.6%)
Foreign corporations
159 (1.2%)

Individuals
12,577 (95.8%)

53,38851,691
9,917
4,488
21,181
140,665

23.2%
22.5%
4.3%
2.0%
9.2%
61.2%

5th Fiscal Period

51,576
58,958
10,197
5,516
18,080144,327

22.4%
25.6%
4.4%
2.4%
7.9%
62.8%

Top 10 Unitholders

13,129Unitholders

Unitholders

0%

25%

50%

75%

100%

Number of Investment Units
Individuals
40,788 units(17.7%)

Financial Institutions
140,665 units(61.2%)

Other domestic
corporations
25,621 units(11.1%)

Foreigncorporations
22,896 units(10.0%)End of 4th FP
229,970
units
Individuals
33,226 units(14.4%)

Financial Institutions
144,327 units(62.8%)

Other domestic
Foreigncorporations corporations
24,146 units 28,271 units(10.5%)(12.3%)End of 5th FP
229,970
units

25%

50%

75%

100%

Ratio

1

Japan Trustee Services Bank

22,621

9.8%

2

NikkoCiti Trust and Banking
Corporation
個人その他

14,348

6.2%

3

Nomura Real Estate Development

11,5005.0%

4

The Master Trust Bank of Japan

10,199

4.4%

5

Trust & Custody Services Bank

8,546

3.7%

6

Kawasaki Gakuen (School Corporation)

6,000

2.6%

7

The Gibraltar Life Insurance

5,011

2.2%

8

American Life Insurance Company GAL

4,138

1.8%

9

National Mutual Insurance Federation ofAgricultural Cooperatives

3,993

1.7%

10

The Senshu Bank

3,900

1.7%

90,256

39.2%

30.8%

Total
0%

Units

(The ratio of Top 10 Unitholders for the previous term: 36.0%)

16Forecasts of the Sixth Fiscal Period

Item
Reantal business revenues
Other rental business revenues

Total rental business revenues
Outsourcing expenses
Taxes and duties
Utility expenses
Insurance expenses
Repairs and maintenances
Other expenses
Depreciation
Total rental business expenses

Profits from rental business
Asset Management fees
Operating expenses
Operating profit and loss
Non-operating revenues
Non-operating expenses
Non-operating profit and loss

Current profit
Net income before taxes
Corporate, local and enterprise taxes
Tax adjustment
Net income
Balance brought forward
Retained earnings

6th FP (f orecasts)
5th FP(¥mln)(¥mln)
8,815
9,475
995
1,114
9,810
10,590
981
1,136
666
884
726
882
22
22
302
340
159
115
1,399
1,458
4,257
4,839
5,553
5,751
851
763
142
189
4,558
4,798
9
－
971
960
▲961
▲960
3,597
3,838
3,597
3,838
0
1
0
0
3,596
3,837
0
0
3,596
3,837

Comparison(¥mln)
(%)
660
7.5
119
12.0
780
8.0
154
15.8
218
32.7
155
21.5
0
0.9
37
12.3
▲43
▲27.2
58
4.2
581
13.7
198
3.6
▲88
▲10.3
46
32.7
239
5.3
▲9
▲100.0
▲10
▲1.1
1
▲0.1
240
6.7
240
6.7
0
8.0
0
0.0
240
6.7
－
－
－
－

Outstanding units at period-end

229,970

265,90335,933

15.6

Cash distribution per unit (¥)

15,63814,430▲ 1,208▲ 7.7

Rental revenues
Forecasts were made on the basis of managing 29 properties in total:
28 existing properties plus Sapporo North Plaza acquired on June 1,
2006.

Taxes and duties
Property taxes, urban planning taxes and other duties for the sixth
fiscal period were estimated on the basis of 27 properties out of 29,
which are held at and acquired after the end of the fifth period.

Other rental
business revenues:
Other expenses:

Revenues received as hourly parking charges
utility charges, charges for usage of facility, etc.
Trust fees, commissions, other maintenancefees, etc.
Operating expenses:
Administrative service, custodian, and auditing
fees, etc.
Non-operating expenses: Interests on debts, cost of issuance of units, etc.

17

4. Fund Management Results

18

Results of Investment Sector
Major Results

Investment Environments
Sale by financial institutions and business corporations
has decreased
Properties held by private funds have increased

Five new investments were made toproperties at premier locations

Decrease in cap rate has spread to regional cities
Information about pre-launch development projects (land)
has increased

Amount of information about properties has decreased

Continued growth, due to the group network
of NRE, has been achieved

Geographical diversification of portfolio has
further undergone

Quality of properties has bipolarized＜Number of information brought to us＞
us＞
Time ofinformation
brought
Number of
information

Considered

2005

2006

Nov

Dec

Jan

Feb

Mar

Apr

Total
5th FP

Total
4th FP

179

93

87

114

98

116

687

934

Multiple-channel
Multiple-channelinformation
information network
networkbased
based
on
trust
on trust
Information-sensitive
Information-sensitivegroup
group systemsystem88

Underconsideration

12

Decision
Decisionmaking
making based
based ononinvestment
investment
experienceandfinancialstrengthexperience and financial strength19

Properties Acquired during the Current Period (1)NOF Sendai Aoba-dori Bldg

【Features】

Location• In the heart of premier office area of the city

Ichiban-cho, Aoba-ku, Sendai

Floor space 12,977.45㎡ (3,925.67 tsubo)
Type of
Land: Ownership
Ownership Bldg: Ownership
Acquisition ¥3,200 mln
Price• Tenant companies are recognized nationwide【Policy】• Renovate to draw out the potential of location• Leasing reflecting market conditions andimprovement of current CS → Greater revenues

Date ofNov 30, 2005
acquisition

Osaka Chowa Bldg

【Features】

Location• Located on Midosuji Avenue of central Osaka

Kawaramachi, Chuo-ku, Osaka

Floor space 21,007.98㎡ (6,354.91 tsubo)
Type of
Land: Ownership
Ownership Bldg: Ownership
Acquisition ¥12,900 mln
Price• Air conditioning system and OA floor renewed【Policy】• Maintain current occupancy rate
• Increase in rent of existing tenants along withmarket recovery

Date ofNov 30, 2005
acquisition

Hiroshima Chowa Bldg

【Features】

Location• In the heart of business/commercial area

Tatemachi, Naka-ku, Hiroshima

Floor space 8,206.91㎡ (2,482.59 tsubo)
Type of
Land: Ownership
Ownership Bldg: Ownership
Acquisition ¥2,100 mln
Price
Date ofNov 30, 2005
acquisition• Capable of smaller compartments【Policy】• Improve occupancy rate by strategic leasing→ Greater revenues• Implementation of changes in property
management (eg. change of opening hour)→ Improved CS

20

Properties Acquired during the Current Period (2)Nishi-Shinjuku Showa Bldg

【Feature】

Location• Highly concentrated business area in the west of
Shinjuku Station

Nishi-Shinjuku, Shinjuku-ku, Tokyo

Floor space 10,902.22㎡ (3,297.92 tsubo)*1
5,858.26㎡ (1,772.12 tsubo)*2*1: Entire Bldg *2: Owned portion• Great convenience and tenants to attract
customers

Type of
Land: Co-ownership
Ownership Bldg: Compart. ownership【Policy】

Acquisition ¥8,800 mln
Price
Date ofNov 30, 2005
acquisition• Timely marketing and revision of rent onmarket recovery

Crystal Park Bldg
Location

Gotenyama, Musashino, Tokyo

Floor space 6,462.19㎡(1,954.81 tsubo)*1
3,868.36㎡(1,170.17 tsubo)*2*1: Entire Bldg *2: Owned portion

Type ofOwnership

Land: Co-ownership
Bldg: Compart. ownership

AcquisitionPrice¥3,700 mln

Date ofacquisition

Feb 28, 2006

• Emphasize locational convenience【Feature】• 2-minutes walk from Kichijoji Station,a center of western Tokyo• Local community-based tenants【 Policy 】• Maintain current occupancy rate
• Increase of current rents

Sapporo North Plaza【Feature】(To be acquired in the 6th FP)• In the heart of business/commercial area

Location• Access from underpass expected in 2010

Kita Ichijo Nishi,
Chuo-ku, Sapporo

Floor space 18,842.51㎡ (5,699.85 tsubo)【 Policy 】

Type ofOwnership

Land: Ownership
Bldg: Ownership• Higher occupancy rate based on advantageous
location→ Greater revenues

AcquisitionPrice¥6,820 mln• Improve further convenience in future→ More stable management baseDate ofacquisition

Jun 1, 2006

21

Diversification of Portfolio (1) “Assets”
Diversification by Location (Based on Acquisition Price)
End of 4ththFP (Oct 2005)
End of 4 FP (Oct 2005)

Current FP
Current FP(as of Jun 20, 2006)(as of Jun 20, 2006)

End
第5期(05/12/20現在)
of 5ththFP (Apr 2006)
End
第5期(05/12/20現在)
of 5 FP (Apr 2006)
Other cities

Other cities
Central Tokyo

10.5%

Central Tokyo

16.7%

67.0%

72.6%
Suburban Tokyo

Suburban Tokyo

16.9%

16.2%

Other cities
Central Tokyo

19.0%

65.2%
Suburban Tokyo
15.8%

Diversification by Property (Top 10 Named Based on Acquisition Price)
End of 4ththFP (Oct 2005)
End of 4 FP (Oct 2005)
Other 13 bldgs
23.8%

End of 5ththFP (Apr 2006)
End of 5 FP (Apr 2006)

Shinjuku Nomura Bldg
18.4%

Current FP
Current FP(as of Jun 20, 2006)(as of Jun 20, 2006)

Shinjuku Nomura Bldg
Other 18 bldgs

16.1%

30.3%

Technoport Kamata B

Toshin Tameike Bldg

ＮＯＦ Toyocho Bldg

3.5%

3.1%

NOF Toyocho Bldg

Nishi-Shinjuku
Showa Bldg

3.6%

4.5%
NOF Shiba Bldg
4.8%
NOF Shibuya Koen-dori Bldg
5.7%

15.6%

32.2%

3.1%

NOF Kawasaki
Higashiguchi Bldg

Shinjuku Nomura Bldg
Other 19 bldgs

JAL Bldg
15.7%
NOF Nihonbashi
Honcho Bldg
9.8%
Tennozu
Park Side Bldg
7.0%

3.7%
NOF Kawasaki
Higashiguchi Bldg
3.9%
NOF Shiba Bldg
4.2%
NOF Shibuya Koen-dori Bldg
5.0%

JAL Bldg
JAL Bldg
13.7%
NOF Nihonbashi
Honcho Bldg
8.6%
Tennozu
Park Side Bldg
6.1%
Osaka Chowa Bldg
5.4%

ＮＯＦ Toyocho Bldg
3.0%
Nishi-Shinjuku
Showa Bldg
3.6%
NOF Kawasaki
Higashiguchi Bldg
3.8%
NOF Shiba Bldg
4.0%
NOF Shibuya Koen-dori Bldg

13.4%

NOF Nihonbashi
Honcho Bldg
8.3%
Tennozu
Park Side Bldg
6.0%
Osaka Chowa Bldg
5.2%

4.8%

22

Diversification of Portfolio (2) “Tenants”
Top 10 Tenants (by Space)

Diversification in Business (by Space)
End of 5th FP (Apr 2006)
Weight in
portfolio(%)

Weight forprevious
term (%)

42,084.11

14.6

16.5

Chemical 1.7%

18,218.17

6.3

7.2

Pharmaceutical 1.9%

3,699.38

1.3

1.5

Others 2.0%

501.350.2

0.2

6,547.74

2.3

2.6

2006.12.31

809.150.3

0.3

2008.5.31

1,206.55

0.4

0.5

2007.12.31

1,072.69

0.4

0.4

Real Estate
5.1%

2007.11.30

1,847.63

0.6-

2007.3.31

2,834.48

1.0

1.1

Retail
5.1%

Shinjuku Nomura Bldg

2013.11.30

3,590.75

1.2

1.4

Real Estate Nomura Osaka Bldg

2013.11.30

345.370.1

0.1

2013.11.30

1,266.19

0.4

0.5

2007.4.30

4,160.94

1.4

1.6

2007.10.31

3,652.38

1.3

1.4

2007.2.28

3,598.83

1.2

1.4

2010.1.31

2,774.75

1.0-

2010.1.31

647.01

0.2-

2007.2.14

3,221.93

1.1

1.3

102,079.40

35.4

TenantBuiness

BuuildingExpiry ofcontract

Leased
space
（㎡）

1

Flagship Properties Inc.

Real Estate

JAL Bldg

2015.3.31

2

XYMAX Corporation

Real Estate

NOF Toyocho Bldg

2009.11.30

3

Fujitsu Ltd.

Elctronics

Technoport Kamata2007.3.31
B Ridge
Faret Tachikawa
2007.12.31
Center Square
NOF Shin-yokohama
2006.9.30
Bldg
Nomura Osaka Bldg

45

Nomura Facilities Co., Ltd.

Nomura Real Estate
Development Co., Ltd.

Shinjuku
Nomura Bldg
NOF Utsunomiya
Bldg
Real Estate
Nomura Yotsubashi
Bldg
Nomura Hiroshima
Bldg

6

Fuji Xerox Office Supply Co.,Ltd.

7

Ito-Yokado Co., ltd.

8

Corporate Software Ltd.

IT

9

Shinsei Bank Ltd.

Bank

Wholesale
RetailNomura Yotsubashi
Bldg
Surugadai Plaza
Bldg
Technoport Kamata
B RidgeTennozu Park Side
Bldg
Osaka Chowa Bldg

10

Daiken Corporation
Total

End of 5th FP (Apr 2006)

Other

Hiroshima Chowa
Bldg
NOF Nihonbashi
Honcho Bldg

Other
19 businesses
12.5%

IT
16.8%

Securities 2.2%
Construction 2.4%

Total

Banking 2.6%

467

tenants

Insurance 4.3%

Airline
15.3%

Service
11.7%
Electronics

8.0%

Wholesale
8.5%(Note) Broken-down by business of the sub-lessees in case of sub-lets.

Medium-Term Contracts
Medium-term contracts expiring after three years from now:
End of 5th FP(Apr 2006)

25.3% (based on floor space)
21.0% (based on contract rent)23

Results of Asset Management Sector

Increase in profitability of portfolio

Enhance competitiveness by renovation

Increase in appraisal value at the end of the fiscal period

Increasenues
reve
Increasein
inearningearning power
powerof
ofportfolio
portfolio that
thatproduces
producesstablestablerevenues
revenues

24

Increase in Earning Power of Portfolio
Effects of Move-ins and Move-outs on Rent
Changes in revenue caused by “comers” and “leavers” (defined as the average rent of move-ins and move-outs respectively).
Shinjuku Nomura Bldg, Nishi-Shinjuku Showa Bldg, NOF Kawasaki Higashiguchi
Bldg, Asahi Seimei Yokohama Nishiguchi Bldg, Yanagibashi Sanshin Bldg, Osaka
Chowa Bldg
• No change (comers = leavers) ⇒ 2 cases (Toshin Tameike Bldg, NOF Utsunomiya Bldg)• Increase (comers > leavers) ⇒ 6 cases• Decrease (comers < leavers) ⇒ 3 cases (Nomura Osaka Bldg, Hiroshima Chowa Bldg, Faret Tachikawa Center Square)

Changes in Rent of Renewed Tenants
Number of
renewals
100%

50

46

54

4.0%

6.5%

1.9%

48

Stable Occupancy Rate

100

4th FP

14.6%

21.0%

98.4% 98.4% 98.3%
97.7% 97.8% 97.8% 97.7%

52.0%

97.2% 97.3%

96.9%

97.1%

97.3%

98.2%

98.4% 98.3%

98.0%
97.8%

97.6%

95.0%
69.6%

83.3%
72.9%
70.0%

Flat

40%

20%

6th FP (Forecast)

Up

80%

60%

5th FP

100.0%

90.0%
CentralTokyo
SuburbanTokyo
Other cities

44.0%

Average

23.9%
14.8%

12.5%

9.0%

4th FP

5th FP0%
1st FP

2nd FP

3rd FP

Down

85.0%

May
2005
(Begin of 4th FP)

Oct
2005
(End of 4th FP)

Apr
2006
(End of 5th FP)

Oct
2006
(End of 6th FP)

25

Enhancing Competitiveness of Property by Renovation
Large-Scale Renovation at the Basement Shopping Floor of Shinjuku Nomura Bldg
Purpose of renovation
Competitive differentiation made on Shinjuku Nomura Bldg
from the other skyscrapers in Nishi-Shinjuku area

Stairways/escalators enabled directaccess to the basement shopping floor
from the crossing busy streets.

A glass-roofed apertural area, newshowpiece of the building, allowed highvisibility of shops on the basement floor.

Satisfaction of tenants leads to stronger revenue base

Former banking floor was completely refurbished. This space, now added by an innerterrace and turned into a food court with various new food shops, is a popular spot for
many office workers to have lunch in a pleasing ambience.

26

Move-Ins and Move-Outs

End of 5th FP (28 bldgs): 98.4%, +1.1% from previous term

3,731 tsubo (12,334㎡) : about 4.3% of weighted averageof total floor spaceMove-outs 2,639 tsubo (8,726㎡) : about 3.0% of weighted averageof total floor space⇒ Change 1,091 tsubo (3,607㎡) : More move-ins than move-outs

Nomura Hiroshima Building
Hiroshima Chowa Building
NOF Kobe Kaigan Building
Nomura Yotsubashi Building
Nomura Osaka Building
Osaka Chowa Building
Yanagibashi Sanshin Building
NOF Utsunomiya Building
NOF Sendai Aoba-dori Building
NOF Shin-Yokohama Building-600

End of 4th FP (23 bldgs): 98.8%, +1.5% from previous termMove-ins

Asahi Seimei Yokohama Nishiguchi
Building
NOF Kawasaki Higashiguchi
Building-400

Move-outs
Move-ins

Faret Tachikawa Center Square-1,000

Crystal Park Building
Technoport Kamata B Ridge
NOF Toyo-cho Building
NOF Minami-Shinjuku Building
NOF Kanda Iwamoto-cho Building
Surugadai Plaza Building
Shinagawa NF Building
Toshin Tameike Building
Nishi-Shinjuku Showa Building
NOF Shiba Building
NOF Shibuya Koen-dori Building
Tennozu Park Side Building
NOF Nihonbashi-Honcho Building-800

JAL Building-200

Shinjuku Nomura Building

0

Change in occupancy rate

Space occupied by move-ins and vacated by move-outs（tsubo）

1,000

800

600

400

200

27

End-of-Period Appraisal Value
Building
Shinjuku Nomura Bldg
JAL Bldg
NOF Nihonbashi Honcho Bldg

Central Tokyo

Tennozu Park Side Bldg
NOF Shibuya Koen Dori Bldg
NOF Shiba Bldg
Nis hi-Shinjuku Showa Bldg
Tos hin Tameike Bldg
Shinagawa NF Bldg
Surugadai Plaza Bldg
NOF Kanda Iw amoto-cho Bldg

NOF Minam i-Shinjuku Bldg

Total Central Tokyo
Suburban TokyoNOF Toyo-cho Bldg
Technoport Kamata B Ridge
Crys tal Park Bldg
Faret Tachikaw a Center Square
NOF Kaw asaki Higashiguchi Bldg
Asahi Seimei Yokohama Nishiguchi Bldg

NOF Shin-Yokohama Bldg

Total Suburban TokyoNOF Sendai Aoba Dori Bldg

Other Cities

NOF Uts unom iya Bldg
Yanagibas hi Sanshin Bldg
Osaka Chowa Bldg
Nom ura Osaka Bldg
Nom ura Yotsubas hi Bldg
NOF Kobe Kaigan Bldg
Hiroshim a Chowa Bldg
Nom ura Hiroshima Bldg

Total Other Cities
Grand total

Acquisition priceBook value at end of
5th FP

Appraisal value at
end of 5th FP

Appraisal value at
end of 4th FP(¥ mln)( ¥ m ln)

( ¥ mln)(¥ mln)(¥ mln)Change38,73033,08020,60014,80012,00010,000
8,800
7,400
5,500
5,150
3,080
2,280
161,420
7,550
6,430
3,700
3,290
9,500
5,050
3,600
39,120
3,200
2,970
3,550
12,900
6,410
3,940
3,280
2,100
1,930
40,280240,820

39,201
33,94520,55814,223
12,595
10,211
8,803
7,635
5,375
5,208
3,061
2,285
163,104
7,245
6,322
3,741
3,152
9,726
5,095
3,491
38,774
3,184
2,807
3,638
12,860
6,378
3,799
3,129
2,088
2,134
40,021
241,901

48,00030,94022,20016,90013,90010,300
9,110
7,510
5,960
5,430
3,430
2,460
176,140
7,950
6,870
3,800
4,050
9,680
5,580
3,790
41,720
3,220
3,210
3,580
13,100
7,700
4,950
3,320
2,100
2,080
43,260261,120

41,00030,94021,40016,20014,00010,300
8,800
7,400
5,740
5,410
3,340
2,410
166,940
7,950
6,870
3,770
3,900
9,590
5,560
3,680
41,320
3,200
3,190
3,560
12,900
6,950
4,600
3,310
2,100
2,080
41,890250,150

7,000
800
700
-100
310
110
220
20
90
50
9,200
30
150
90
20
110
400
20
20
20
200
750
350
10
1,370
10,970

17.1%
3.7%
4.3%
-0.7%
3.5%
1.5%
3.8%
0.4%
2.7%
2.1%
5.5%
0.8%
3.8%
0.9%
0.4%
3.0%
1.0%
0.6%
0.6%
0.6%
1.6%
10.8%
7.6%
0.3%
3.3%
4.4%

（Ａ）

（Ｂ）

Difference between appraisal value
and book value¥19,219 mln

*

*

*

*

*

Difference from previous
term* For these buildings acquired during the 5th FP, appraisal
value is that of the time of acquisition.

（¥83,572 / unit ）28

Results of Financial Sector
Yields of 10-year Government Bonds(%)

Major Achievements(Jun 1, 2005 – Jun 21, 2006)

2.0

Issuance of ¥20 billion corporation bonds

1.8
1.6

Conversion of floating interest rates to longlongterm fixed interest rates

1.4
1.2
1.0
2005/6

2005/10

2006/2

2006/6
Source: Bloomberg

Implementation of effective use of security
deposits received

Well-balanced Debt Management to Achieve:
Control of proper LTV level
Longer periods and fixing of interest rates
Diversification of duration (4 - 5 years on average)
Variety of methods to raise funds

Securing
Securing ability
abilityto
to raiseraisefunds
fundsthat
thatenableenablesustainablegrowthinto
futuresustainable growth into future

Effective use of security deposits received, etc.

29

Public Offering of Corporation Bonds and Investment Units
Public Offering of Corporation Bonds

Additional Issuance of Investment Units (for info)

3rd and 4th Series Corporation Bonds

Outline of new issue

Name

Nomura Real Estate Office
Fund, Inc. Third Series
Uninsured Investment
Corporation Bonds. (Ranking
Pari Passu among theSpecified Investment
Corporation Bonds)

Nomura Real Estate Office
Fund, Inc. Fourth Series
Uninsured Investment
Corporation Bonds. (Ranking
Pari Passu among theSpecified Investment
Corporation Bonds)

Total amount¥10 billion¥10 billion

Issuing dateNov 28, 2005

Nov 28, 2005

Maturity dateNov 29, 2010 (5-year bond)Nov 30, 2015 (10-year bond)

Security /Guarantee

Unsecured/unguaranteed

Unsecured/unguaranteed

Interest rate

1.19% p.a.

2.05% p.a.

Use of funds

Acquisition of 4 properties* on Nov 30, 2005, relevant costs, andrepayment of borrowings.

•• Number
Number ofof units
units (Public(Public Offering)
Offering)•• Number
Number ofof units
units (Third(Third Party
Party Allotment)
Allotment)

34,80034,8001,133
1,133•• Offer
Offer Price
Price•• Total
Total amountamount raised
raised¥926,100¥926,100 // unit
unit
¥32,156¥32,156 mln
mln•• Dates
Dates ofof payment
payment

May
May 25,25, 2006
2006 (PO)
(PO)
Jun
23,
2006
(TPA)
Jun 23, 2006 (TPA)

Status after new issue•• Total
Total number
number ofof units
units issued
issued•• Total
Total amountamount ofof investment
investment

265,903
265,903¥156,767¥156,767 mln
mln* Nishi-Shinjuku Showa Bldg, NOF Sendai Aoba Dori Bldg, Osaka
Chowa Bldg, Hiroshima Chowa Bldg

Shelf Registration•• DateSep
Date ofof filingfilingSep 29,29, 2005
2005•• Limit
Limit ofof issuanceissuance ¥100
¥100 billion
billion•• Period
Oct
Period toto issueissue
Oct 7,
7, 2005
2005 –– Oct
Oct 6,
6, 20072007•• UseUse ofof funds
funds

Acquisition
Acquisition ofof specified
specified assets,
assets,repayment
repayment ofofborrowings,
borrowings,redemption
redemption ofof corporation
corporation bonds,
bonds,
repayment
repayment ofof security
security deposits,
deposits, repair
repair andandrenovation,
renovation, operating
operatingcapital
capitalChanges in LTV* UnauditedthEnd
Endofof55thFPFP(Apr(Apr2006)
2006)

44.7%
44.7%

Capitalincreasing

Current
CurrentDate
Date
(Jun
(Jun23,23,2006)
2006)

36.4%
36.4%**

Funds raised by PO were used to acquire a property at ¥6.82 bln,and to repay ¥16 bln of borrowing.

30

Overview of Financial Status
Financial Status as at the end of 5th FP (Apr 30, 2006)
LTV (on a basis of total assets)
End of 5th fiscal period

Average remaining duration of long-term fixed debts(including Corporation Bonds)

44.7%

5.1years
5.1years(＋5.8% from previous term)Previous term: 3.9 years

Weighted average of interest rate of all the debts

Continuation
Continuationof
ofconservative
conservative
management
management

1.29%
1.29%

Status of debts

Previous term: 1.13%

List of lenders (Total 25 financial institutions)(¥ bln)■ ST vs. LT Debts
Long-term*¥88.5 bln
(73.8%)

Shot-term¥31.5 bln
(26.3%)*Including Corporation Bonds■ Floating vs. Fixed Rates
Fixed rate*¥98.0 bln
(81.7%)

Floating rate
¥22.0 bln
(18.3%)*Including Interest Rate Swaps

LenderTotal amount ofdebt remaining

LenderTotal amount ofdebt remaining

Bank of Tokyo-Mitsubishi UFJ

15.0

Mizuho Corporate Bank

2.0

Sumitomo Mitsui Banking Corp.

7.5

Yamanashi Chuo Bank

2.0

Mitsubishi UFJ Trust and Banking

6.0

Chugoku Bank

2.0

Sumitomo Trust & Banking Corp.

6.0

Bank of Fukuoka

2.0

Norinchukin Bank

5.0

Aozora Bank

2.0

Dai-Ichi Mutual Life Insurance

5.0

Taiyo Life Insurance

2.0

Nomura Trust and Banking

5.0

Daido Life Insurance

2.0

Chuo Mitsui Trust and Banking

4.0

Zen-Kyo-Ren

2.0

Mitsui Life insurance

4.0

Development Bank of Japan

2.0

Iyo Bank

3.5

Keiyo Bank

1.0

Chiba Bank

3.0

Meiji Yasuda Life Insurance

1.0

Hachijuni Bank

2.5

Mitsui Sumitomo Insurance

1.0

Hiroshima Bank

2.5
Total borrowings

90.0

Corporation Bonds

30.0

31

Post-Balance Sheet Financial Status
Financial Status as of June 23, 2006
LTV (on a basis of total assets)
As of June 23, 2006

36.4% (unaudited)

Average remaining duration of long-term fixed debts(including Corporation Bonds)
5.0
5.0years
years(-8.3% from end of 5th FP for the following reasons)• New public offering• Acquisition of Sapporo North Plaza at ¥6.82 billion• Repayment of borrowings for ¥16 billion

Weighted average of interest rate of all the debts
1.43%
1.43%
Diversification of maturity

Status of debts(¥ bln)■ ST vs. LT Debts
Long-term*¥88.5 bln(85.1%)

Short-term¥15.5 bln
(14.9%)■ Floating vs. Fixed Rates
Fixed rate*¥98.0 bln
(94.2%)

Floating
rate¥6.0 bln(5.8%)

20

Corporation bonds
Borrowings

15

10

5

6th
FP

*Including Corporation Bonds

8th
FP

10th
FP

12th
FP

14th
FP

16th
FP

18th
FP

20th
FP

22nd
FP

24th
FP

26th
FP

28th
FP

30th
FP

32nd
FP

*Including Interest Rate Swaps

32

Appendix

33

List of Property
End of 5th FP (Apr 2006)
Property

Nishi-Shinjuku,
Shinjuku-ku
Higashi-Shinagawa,
JAL Bldg
Shinagawa-ku
Nihonbashi Honcho,
NOF Nihonbashi Honcho
Chuo-ku
Bldg
Higashi-Shinagawa,
Tennozu Park Side Bldg
Shinagawa-ku
Udakawa-cho,
NOF Shibuya Koen-dori Bldg
Shibuya-ku
Shiba,NOF Shiba Bldg
Minato-ku
Nishi-Shinjuku,
Nishi-Shinjuku Showa Bldg
Shinjuku-ku
Akasaka,Toshin Tameike Bldg
Minato-ku
Higashi-Shinagawa,Shinagawa NF Bldg
Shinagawa-ku
Kanda Surugadai,
Surugadai Plaza Bldg
Chiyoda-ku
NOF Kanda Iwamoto-cho
Iwamoto-cho,
Chiyoda-ku
Bldg
Sendagaya,
NOF Minami-Shinjuku Bldg
Shibuya-ku
Shinsuna,
NOF Toyo-cho Bldg
Koto-ku
Minami-Kamata,Technoport Kamata B Ridge
Ota-kuGotenyama,
Crystal Park Bldg
Musashino City
Faret Tachikawa Center
Akebono-cho,Tachikawa City
SquareKawasaki-ku,
NOF Kawasaki
Kawasaki City
Higashiguchi Bldg.
Nishi-ku,
Asahi Seimei Yokohama
Yokohama City
Nishiguchi Bldg
Kohoku-ku,
NOF Shin-Yokohama Bldg
Yokohama City
Aoba-ku,NOF Sendai Aoba-dori Bldg
Sendai City
Baba-dori,
NOF Utsunomiya Bldg
Utsunomiya City
Nakamura-ku,
Yanagibashi Sanshin Bldg
Nagoya City
Chuo-ku,
Osaka Chowa Bldg
Osaka City
Chuo-ku,
Nomura Osaka Bldg
Osaka City
Nishi-ku,
Nomura Yotsubashi Bldg
Osaka City
Chuo-ku,
NOF Kobe Kaigan Bldg
Kobe City
Naka-ku,
Hiroshima Chowa Bldg
Hiroshima City
Naka-ku,
Nomura Hiroshima Bldg
Hiroshima City

Suburban Tokyo

Central Tokyo

Shinjuku Nomura Bldg

Other Cities

Location

Total

Completion

1978. 5

Floors Total floor space(Ground)(Note 1, 2)
117,258.88

50

Leasable
space （㎡）

Leased space（㎡）

Occupancy
rate

Number oftenants

Standard floor
space （㎡）Airconditioning

Room height（㎜）

PML(Note 3)Acquisitiondate

Acquisition
price (￥mln)

31,589.26

31,347.29

99.2%

86

1,262.37

Each 1/4 floor

2,600

5%

2003.1238,7301996. 626

①81,421.13②25,260.48

42,084.11

42,084.11

100.0%

1

2,214.55

Each 1/6 floor

2,700

6%

2005. 333,0801961. 4(Extension 1968.4)

829,430.67

19,233.28

19,233.28

100.0%

13

2,615.23

Each span

2,650

14%

2003.12

20,6001995. 121

①43,893.46②17,587.30

18,051.61

18,051.61

100.0%

14

1,331.14

Each 1/4 floor

2,650

6%

2004. 214,8001987. 985,358.55

3,420.16

3,420.16

100.0%

3

442.38Each span

2,500

12%

2004. 912,0001991. 3

7

11,425.20

8,165.10

8,165.10

100.0%

10

1,260.41

Each span

2,600

14%

2004. 5

10,0001982. 411

①10,902.22②5,858.26

5,659.96

5,466.42

96.6%

18

585.99Each span

2,500

13%

2005.118,800(Entire building)1959. 896,478.50

4,715.20

4,275.52

90.7%

12

519.06

Each span

2,500

17%

2005. 97,400

1987.118

10,077.02

7,850.99

7,850.99

100.0%

5928.29Each floor

2,600

11%

2003.12

5,500

1997. 48

5,782.27

4,160.94

4,160.94

100.0%

1

626.33

Each 1/2 floor

2,700

6%

2004. 2

5,150

1988. 7

94,698.97

4,076.38

4,076.38

100.0%

8

480.07

Each floor

2,550

14%

2004. 2

3,080

1986. 38

3,160.05

2,464.71

2,464.71

100.0%

5

327.66

Each floor

2,500

12%

2004. 62,280

1989.117

18,051.08

18,218.17

18,218.17

100.0%

1

1,986.46

Each span

2,550

14%

2003.12

7,550

1990. 911

21,516.54

13,683.46

13,370.32

97.7%

13

1,148.45

Each span

2,650

10%

2003.126,430

Each floor(Entire ridge)

3,900.85

3,900.85

100.0%

11

193.93～590.352,500

14%2006. 23,700

6,853.38

6,624.10

96.7%

15

1,099.32

Each 1/4 floor

2,600

10%

2003.123,290

10,932.69

8,284.03

8,284.03

100.0%

27

684.62Each 1/3 floor

2,550

16%

2005. 69,500

910,055.13

6,817.76

6,817.76

100.0%

29

794.75

Each 1/8 floor

2,500

14%

2005. 55,050

911,149.99

8,074.83

8,074.83

100.0%

3

940.84Each span

2,500

17%

2003.12

3,600

1991.10

11

1994.1212①6,462.19②3,868.36①33,706.03②6,865.80

1988. 3

12

1985.10
1990.101968. 7

11

12,977.45

6,165.70

5,839.34

94.7%

27

802.79Each span

2,480

8%

2005.11

3,200

1999.12

10

10,479.63

5,887.40

5,819.24

98.8%

26

664.68Each span

2,700

5%

2003.122,970

1991. 312

7,363.25

4,655.74

3,552.0476.3%

9405.96

Each 1/2 floor

2,460

14%

2005. 93,550

1974. 410

21,007.98

12,240.88

12,100.35

98.9%

16

1,234.14

Each 1/4 floor

2,600

13%

2005.11

12,9001983.12

12

23,522.82

16,977.79

16,977.79

100.0%

29

1,336.52

2,500

19%

2003.12

6,410

1991.1115

16,845.87

11,558.68

11,558.68

100.0%

18

797.352,650

13%2003.12

3,940

1998. 2

16

10,292.93

6,427.01

5,712.31

88.9%

28

528.43

Each span

2,600

7%

2003.123,280

1966.1112

8,206.91

4,334.75

3,531.00

81.5%

23

515.17

Each span

2,450

13%

2005.11

2,100

1976. 7

9

11,950.37

7,911.97

7,770.46

98.2%

16

1,047.54

Each floor
Auxiliary

2,450

11%

2003.12

293,464.10

288,747.78

98.4%

467

Each floor
Auxiliary
Each floor
Auxiliary

7.6%

1,930
240,820(Note 1) Total floor space is taken from the registry book.
(Note 2) Total floor space of the properties owned in compartment, except Technoport Kamata B Ridge, is expressed as ① entire building, and ② portion owned by the Fund.
(Note 3) Rate of PML (Probable Maximum Loss) for each building was calculated by Shimizu Construction. 7.6% at the bottom field is for the entire portfolio.

34

Earnings by Property(￥000)
Item
Number of business days
Rental business revenues
Rental revenues(incl. common area charges)

Other revenues
Rental business expenses
Property management fees
Taxes and duties
Utility expenses
Insurance espenses
Repair and Maintenance
Other expenses
Depreciation
Rental Profits
Net Operating Income (NOI)
Item
Number of business days
Rental business revenues
Rental revenues(incl. common area charges)

Other revenues
Rental business expenses
Property management fees
Taxes and duties
Utility expenses
Insurance espenses
Repair and Maintenance
Other expenses
Depreciation
Rental Profits
Net Operating Income (NOI)
Item
Number of business days
Rental business revenues
Rental revenues(incl. common area charges)

Other revenues
Rental business expenses
Property management fees
Taxes and duties
Utility expenses
Insurance espenses
Repair and Maintenance
Other expenses
Depreciation
Rental Profits
Net Operating Income (NOI)

Shinjuku
Nomura Bldg.

181
1,745,048
1,557,102
187,945871,895
203,293
187,661
186,3283,444
58,46050,292
182,413873,152
1,055,565
NOF Kanda
Iwamoto-cho Bldg.

181
148,090
132,498
15,59147,93011,534
9,604
7,839
258
2,111
782
15,798100,159
115,958
NOF Utsunomiya
Bldg.

181
172,451
140,914
31,537111,928
24,322
16,106
18,517
629
9,362
3,301
39,68760,523
100,211

JAL Bldg.*

181

145,158
718,049
863,208
NOF Minami
Shinjuku Bldg.

181
102,158
88,111
14,046
37,608
8,163
8,148
7,412
185
3,174
1,668
8,856
64,54973,405
Yanagibashi
Sanshin Bldg.

181
108,118
97,07011,047
72,976
11,945
6,110
10,585
380
5,003
7,335
31,61535,142
66,757

NOF Nihonbashi
Honcho Bldg.

Tennozu Park
Side Bldg.

181
784,738
743,091
41,647274,71767,66237,41850,155
1,454
11,311
5,894
100,819
510,020
610,840
NOF Toyo-cho
Bldg.*

181774,704
658,233
116,470
404,588
136,801
55,82032,6891,634
14,757
3,581
159,303
370,116
529,419181
366,201
337,942
28,25984,151
17,66523,67911,256
296
3,025
1,511
26,716
282,050
308,767

Technoport
Kamata B Ridge

Crystal Park Bldg.

181

181
438,534
379,393
59,141
243,646
53,02537,38346,498
1,075
32,377
6,160
67,125
194,888
262,01373,363
171,505
244,868
Osaka Chowa
Bldg.

NOF Shibuya
Koen-dori Bldg.

NomuraOsaka Bldg.

152
400,738
347,581
53,156
152,971
32,95625,643
26,713
818
5,385
3,690
57,762
247,766
305,529181
456,151
387,907
68,244244,313
62,15442,03150,203
1,247
24,145
13,84050,690211,838
262,528

NOF Shiba Bldg.

181
326,011289,334
36,676
120,485
20,32824,87521,087
604
4,125
2,172
47,290205,526
252,816

Nishi-Shinjuku
Showa Bldg.

152
240,556
218,479
22,07773,03030,405－
13,266
678
5,750
4,515
18,414
167,526
185,940

Toshin Tameike
Bldg.

181
180,165
167,143
13,02264,362
14,372
15
15,589
338
5,329
9,478
19,240115,803
135,043

Shinagawa NF
Bldg.

181
257,636
224,131
33,505
113,107
21,682
16,243
21,978567
18,866
2,635
31,134
144,528
175,662

Surugadai Plaza
Bldg.*

181

30,377
121,722152,099

Asahi Seimei

Faret Tachikawa
NOF Kawasaki
NOF ShinNOF Sendai AobaYokohama Nishiguchi
Center Square Higashiguchi Bldg.
Yokohama Bldg.*
dori Bldg.
Bldg.

62

181
315,729274,241
41,487
129,358
22,5509,270
22,987
610
3,831
7,191
62,915
186,371249,286

181
228,243
202,520
25,72279,45023,821
9,092
16,365
547
2,843
3,267
23,512
148,793
172,305

NomuraNOF Kobe Kaigan Hiroshima Chowa
Yotsubashi Bldg.
Bldg.
Bldg

NomuraHiroshima Bldg.

41,204
37,4683,735
24,001
10,278
－
2,139
105
430
－
11,047
17,20328,251

181
313,955
278,734
35,221
197,761
45,70430,88330,530857
45,4382,291
42,055
116,194
158,250181
224,305
205,164
19,141
118,829
34,851
14,60730,662
530
473
6,337
31,366
105,475
136,842

181
184,622
153,808
30,813
109,735
24,93317,003
21,811
755
6,743
3,896
34,59074,887
109,478152
87,66673,593
14,07247,005
13,198
5,664
10,248
288
3,782
4,186
9,635
40,66150,296

181
209,919
186,70323,215
94,846
27,06019,085
18,544596
13,566
2,857
13,134
115,072
128,207181

41,471
85,384
126,856

152
139,545
117,10722,437
71,332
20,6208,781
13,547
477
2,659
1,417
23,827
68,212
92,040Total 28 bldgs

9,810,526
8,815,222
995,3034,257,398
981,358
666,061
726,301
22,318302,896
159,138
1,399,324
5,553,127
6,952,451* Detailed figures are not disclosed due to compelling reasons. However, they are included in "Total 28 bldgs".

35

Map of Property
Central Tokyo

Suburban Tokyo

Shinjuku Nomura Bldg

Nishi-Shinjuku Showa Bldg

JAL Bldg

Toshin Tameike Bldg

NOF Nihonbashi-Honcho Bldg

Shinagawa NF Bldg

Tennozu Park Side Bldg

Surugadai Plaza Bldg

NOF Shibuya Koen-dori Bldg

NOF Kanda Iwamoto-cho Bldg

NOF Shiba Bldg

NOF Minami-Shinjuku Bldg

NOF Toyo-cho Bldg
Technoport Kamata B Ridge
Crystal Park Bldg
Faret Tachikawa Center Square
NOF Kawasaki Higashiguchi Bldg
Asahi Seimei Yokohama Nishiguchi Bldg
NOF Shin-Yokohama Bldg

Other cities
Sapporo North PlazaNOF Sendai Aoba-dori Bldg
NOF Utsunomiya Bldg
Yanagibashi Sanshin Bldg
Osaka Chowa Bldg
Nomura Osaka Bldg
Nomura Yotsubashi Bldg
NOF Kobe Kaigan Bldg
Hiroshima Chowa Bldg
Nomura Hiroshima Bldg

36

Photo of Property (29 properties as of Jun 21, 2006)
02

01

03

Shinjuku
Nomura Bldg

11

NOF Kanda
Iwamoto-cho Bldg

21

NOF Sendai
Aoba-dori Bldg

JAL Bldg

12

NOF Nihonbashi
Honcho Bldg

13

NOF MinamiShinjuku Bldg

22

NOF Utsunomiya
Bldg

05

04

Tennozu
Park Side Bldg

14

NOF Toyo-cho Bldg

23

Yanagibnashi
Sanshin Bldg

Technoport
Kamata B Ridge

06

NOF Shibuya
Koen-dori Bldg

15

Crystal Park Bldg

24

25

Osaka Chowa Bldg

Nomura Osaka Bldg

NOF Shiba Bldg

16

Faret Tachikawa
Center Square

26

NomuraYotsubashi Bldg

07

Nishi-Shinjuku
Showa Bldg

17

NOF Kawasaki
Higashiguchi Bldg

27

08

09

10

Toshin Tameike Bldg

Shinagawa NF Bldg

Surugadai Plaza Bldg

18

19

20

Asahi Seimei Yokohama
Nishiguchi Bldg

28

NOF Kobe
Kaigan Bldg

NOF ShinYokohama Bldg

Sapporo North Plaza

29

Hiroshima
Chowa Bldg

NomuraHiroshima Bldg

37

Acquisition Channel of Property
Acquisition channel

Originally owned
by Nomura Real
EstateDevelopment

Acquired at the time of inception

Shinjuku
Nomura Bldg

Faret Tachikawa
Center Square

Nomura Yotsubashi Bldg

• Information fromor
• Intermediation *by Nomura Real
Estate groupcompanies

ＮＯＦ Nihonbashi
Honcho Bldg

During 4th FP

During 5th FP

During 6th FP

Tennozu
Park Side Bldg

Nomura Hiroshima Bldg

ShinagawaNF Bldg

ＮＯＦ ShinＮＯＦ Utsunomiya
Yokohama Bldg
Bldg

Information fromsources outside
Nomura Real Estategroup

Nomura Osaka
Bldg

During 1st and 3rd FP

NOF Toyo-cho
Bldg

ＮＯＦ Kobe
Kaigan Bldg

Technoport
Kamata B Ridge

ＮＯＦ Kanda
Iwamoto-cho
Bldg

Asahi Seimei
Yokohama
Nishiguchi Bldg

ＮＯＦ MinamiShinjuku Bldg

ＮＯＦ Sendai
Aoba-dori Bldg

SapporoNorth Plaza

Osaka Chowa Hiroshima Chowa
Bldg
Bldg

JAL Bldg *Surugadai
Plaza Bldg

Nishi-Shinjuku
Showa Bldg

NOF
Shibuya
Koen-dori
Bldg

ＮＯＦ
Shiba Bldg

ToshinTameike
Bldg

Yanagibashi ＮＯＦ Kawasaki
Sanshin Bldg Higashiguchi
Bldg

Crystal Park
Bldg

38

Unit Price and Aggregate Market Value (Dec 4, 2003 – Jun 21, 2006)
Market value (¥ mln)

Unit price (¥)
1,000,000

900,000

500,000

Aggregate market value (as of Jun 21, 2006) : ¥236,174 mln
All-time high price: ¥1,030,000
All-time low price: ¥ 505,000
Aggregate market value

400,000

Closing price4th public offering¥926,100

800,000

700,000

3rd public offering¥740,782

300,000

200,000

600,000
2nd public offering¥588,000

500,000

100,000

Initial public offering¥500,000
400,000
2003/120
2004/3

2004/6

2004/92004/12

2005/3

2005/6

2005/92005/12

2006/3

2006/639

Structure of the Asset Management Company
OutlineUnitholders’ Meeting[ Registered Trade Name ]Nomura Real Estate Asset Management Co., Ltd.

Auditors
Board of Directors[ Date of Incorporation ]January 24, 2003

Executive
Director
Compliance
Committee

Compliance & Risk
Management Group *[ Paid-up Capital ]¥300,000,000

Office Management
Division

Residence Management
Division

Investment Committee

Investment Committee

Acquisition
Group

Asset
Management
Group

Fund
Management
Group

Financial &Control Group(Responsibilities)(Responsibilities)(Responsibilities)(Responsibilities)

Businesses
relevant to due
diligence andacquisition ofproperties to beinvested.

Businesses
relevant tomanagement,
maintenanceand sale ofproperties in theportfolio.

Businesses
relevant tomanagement of
portfolio,
disclosure of
information (IR).

Fund raising.
Accounting,taxes andliability
management of
NREOF.
Accounting,taxes andadministration of
NREAM.

Acquisition
Group

Asset
Management
Group

Fund
Management
Group

Financial &Control Group(Note)
Responsibilities of Groups under Residence Management Division are
omitted because these groups are not engaged in management of theinvestment assets of the portfolio.

*Compliance & Risk Management Group(Responsibilities)
Businesses relevant to compliance and risk management.
Internal audit.

[ Shareholder ]Nomura Real Estate Holdings Co., Ltd. (100%)[ Number of Employees ]50 (including Directors)[ Description of Business ]Asset management of investment corporation◆License for asset management of investment
corporation: Prime Minister No. 28◆License for discretionary proxy in realty trading:
Minister of Land, Infrastructure and Transportation
No. 18◆License for real estate trading: Governor of Tokyo
No. (1) 81679

40

Below is a message announced jointly with the asset management company at the time of listing on December 4, 2003.

We, at Nomura Real Estate Office Fund Inc., believe that listingof Real Estate Investment Trust (REIT) serves to form a baseon which the nation can build their financial resources. The
long-term investment capital will contribute to stabilization of not
only the real estate market, but also the Japanese economy asa whole.
Many investors wish stable investment more than anything else.
Responding to such needs of asset building, we have set ourinvestment policy as being “stable over mid- to long-term”.
Wishing to make a contribution to the nation’s economic growth
in any way, we are determined to continue doing the best of ourability in our function to combine the private financial resources
directly with the real estates.
AN INVESTOR ORIENTED COMPANY
respecting the trust and expectation of the investors
Nomura Real Estate Office Fund, Inc.
(TSE code: 8959)
http://www.nre-of.jp
Fund Manager: Nomura Real Estate Asset Management Co., Ltd.

41

This document has been prepared for the purpose of provision of information only, andshould not be construed as an offer, solicitation or commercial conduct of any natureassociated with any specific products. Investors wishing to purchase the investment
units of Nomura Real Estate Office Fund, Inc. should contact their own securities
brokers or dealers.
The forward-looking statements with respect to the future financial results contained inthis document should not be construed as a guarantee of the actual performance in the
future.
Although the information contained in this document is intended to be complete andthorough, there is no assurance of precision and safety of the same. Please note thatthe contents of this document is subject to change or cancellation without prior notice.
It is prohibited to make duplication, reproduction, distribution or use of any part or wholeof the information contained in this document without express prior written consent.

42